Verizon Wireless: You are being watched.

Would it bother you if the advertiser on that big billboard you just drove past could find out if you later visited that business in response? Should a store like Best Buy or Sears be able to know if you are only using their showrooms to see a product you will eventually buy online? Should your phone company be able to store your complete travel history for years and then create new products and services to pitch aggregated travel observations to anyone willing to pay?

Verizon Wireless does not think you will have a problem with any of this, because it has quietly begun selling this information through its Precision Market Insights (PMI) service.

AT&T is likely not too far behind with a similar service of its own, potentially earning millions from a comprehensive data trove tracking customer locations, travel history, and web browsing habits for an undetermined length of time.

The Wall Street Journal reports shareholder demand for higher profits is pushing cell phone companies to find new revenue streams, even at the potential risk of alienating customers and privacy advocates.

PMI clients may find out more about you than you realize, even though phone companies promise they will not sell personally identifiable information about their customers.

The Phoenix Suns are PMI clients, and by tracking game attendees, Verizon Wireless was able to tell the sports team:

• 22% of game attendees are from out-of-town;
• Most spectators had children at home, ranged in age from 25-54 and earned more than $50,000 a year;
• 13% of baseball spring training attendees in the Phoenix area also went to Suns games;
• Area fast food restaurants running Suns promotions saw an 8.4% uptick in business from Verizon Wireless customers.

Such information can let the sports team target advertisers and offer evidence-based statistics that any campaign will increase sales, and by how much. Malls can use PMI to find certain types of customers that have a history of lingering in mall stores. Billboard owners can see if their ad messages resulted in higher in-store visits.

Customers using a phone under a commercial or government account are exempt from the tracking program. All residential customers are automatically opted in to take part, unless they specifically opt out.

Privacy advocates are concerned carriers are storing personal customer usage data for an undetermined amount of time, and in a form that could be personally identifiable, even if the provider decides not to sell data with that granularity to third parties. That could make cell phone companies prime targets for government/law enforcement subpoenas.

Last year, Verizon sent a notice to customers opting them in to the program unless they specifically opted out. Stop the Cap! covered the story back then, helping customers wishing to opt out.

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The Wall Street Journal reports wireless carriers were at first slow to sell data on their customers’ usage habits, but not anymore. Shareholders want new sources of revenue, and wireless companies are packaging and selling customer information to get it.  (2 minutes)

Verizon Voice Link: The company’s landline replacement, works over Verizon Wireless.

The New York Public Service Commission has granted limited approval for a Verizon Communications plan to replace traditional landline service on the western half of Fire Island with a wireless voice service some users complain is unstable and unreliable.

Verizon claims its landline network on Fire Island has been damaged irreparably in places, and argued it needed to immediately deploy a wireless alternative before the arrival of thousands of tourists on the island, a popular summer destination.

On May 3, Verizon asked the commission to approve the use of Voice Link, which provides fixed wireless phone service, anywhere in the state if the company can prove there is an equal competitor or if existing copper-based facilities are damaged or too costly to upgrade.

Stop the Cap! reminded local politicians, union representatives, and consumer advocates Verizon’s CEO earlier promised it would decommission its copper wire networks in rural areas in favor of wireless, mostly for financial reasons. The New York State Attorney General’s office took careful note of McAdam’s commitment to abandon copper in their objection letter to the commission.

Verizon CEO Lowell McAdam in 2012:

The vision that I have is we are going into the copper plant areas and every place we have FiOS, we are going to kill the copper. We are going to just take it out of service and we are going to move those services onto FiOS. We have got parallel networks in way too many places now, so that is a pot of gold in my view. And then in other areas that are more rural and more sparsely populated, we have got LTE built that will handle all of those services and so we are going to cut the copper off there. We are going to do it over wireless.

Verizon’s efforts to rush a tariff change without adequate public notice or formal hearings brought complaints from affected customers, unions, and area politicians.

The Communications Workers of America called Verizon’s emergency “self-made.” The company could have begun repair work on Fire Island as early as last November, but instead only came to regulators earlier this month with its Voice Link proposal, while much of the western half of the island remains out of service.

CWA officials are concerned Verizon is using Hurricane Sandy as an excuse to carry out its broader agenda of abandoning rural New York’s landline infrastructure in favor of wireless service.

“Playing on sympathy for the plight of customers whom it has left without service for more than six months, Verizon proposes to implement broad, generic rules that go to the core of its obligation to serve,” said CWA vice president Chris Shelton.

The union considers Verizon’s wireless alternative less adequate than the wireline facilities Verizon wants to abandon. The CWA wants the PSC to study Voice Link’s performance during times of peak cellular usage times, power outages, adverse weather, and inadequate reception.

Thomas Barraga, a legislator in Suffolk County, says his constituents with Voice Link service are already unhappy with its performance and reliability.

“Residents and business owners who had Voice Link installed after Sandy say the connection is unstable and unreliable, and doesn’t provide for DSL Internet or fax service,” Barraga wrote in a letter to the PSC.

“Internet service is so much a part of everyday life it should be consider a basic service and they should be mandated to provide this as well,” writes Fire Island resident Robert Gonzalez. “They should provide this for the same fees and usage rates as they had previously been charging.  As of today they are price gouging.  Prior to Sandy we paid approximately $50 per month for unlimited Internet access.  Now they are putting low limits on our usage for the same $50 per month with severe penalties for going over.  You can opt for higher usage plans at a much greater cost and they are not offering an unlimited plan.”

Stop the Cap! also continues to hear from Fire Island residents about their dissatisfaction with the service. Among the newest complaints we have received:

• “It doesn’t work with collect calls and you cannot dial “0” for operator assistance;”
• “I have to dial 10 digits for all calls, seven digit dialing no longer works even though it did before;”
• “Call Waiting and Caller ID often do not work, and my unit does not ring for incoming calls about 30% of the time and people have to keep calling me back;”
• “When you attempt to take a call when on the line with someone, you cannot get them back after answering a new call;”
• “I cannot use this with my home alarm system at all and the monitoring company keeps notifying police because they think my phone line was cut;”
• “If we had a major storm with three days of power being out, Verizon’s claim Voice Link will work for two hours without power means I would have to feed it up to 72 ‘AA’ batteries, costing more than what the phone line costs me every month;”
• “What does this do to our future? It makes us second class citizens without access to the Internet except through very expensive wireless capped usage plans that cost much more.”

The PSC ruled that allowing Verizon to deploy Voice Link on Fire Island during the peak tourist season will make sure adequate phone service is up and running as quickly as possible. But the commission also made it clear it is unwilling to approve Verizon’s request to extend the service further into rural New York without a thorough review of its performance and customer reaction.

When Industry Canada announced it was planning to boost competition by setting aside certain spectrum for new competitors entering the wireless marketplace, the Conservative government promised Canadians they would see a new era of robust competition and lower prices as a result.

Today, it turns out the only competition around is watching which of the three largest wireless carriers snap up their newest competitors first.

Telus, Canada’s third largest wireless carrier, today announced it was acquiring Mobilicity for $380 million — almost exactly the amount of outstanding debt owed by the Data & Audio Visual Enterprises Holdings’ venture. That means Telus will pick up its competitor just by agreeing to pay its bills.

Mobilicity said it was burning through cash at an alarming rate and simply could not attract enough customers in its home service cities Toronto, Ottawa, Calgary, Edmonton and Vancouver, to become profitable. It also reportedly lacked financial resources to take part in a forthcoming spectrum auction that would have been critical to the company’s long-term survival.

Informal merger talks among the three largest independent carriers — Wind Mobile, Public Mobile, and Mobilicity — reportedly went nowhere.

“Mobilicity has been losing a significant amount of money every month,” Mobilicity’s chief restructuring officer, William Aziz, said today. “The financial strength of Telus will allow the business to be continued in a way that will benefit customers and employees. An acquisition by Telus is the best alternative for Mobilicity.”

But that may not be the best alternative for Canadians. Regulators are expected to scrutinize the merger and current rules do not allow Telus to acquire the spectrum Mobilicity holds until next year. But with few other expected buyers, regulators may have no choice but to allow the deal to go through.

If approved, Telus will pick up Mobilicity’s 250,000 customers and likely switch them to Koodo Mobile, its prepaid division.

Minister Paradis

Mobilicity customers could do worse. Koodo Mobile, given a “C” grade by Canadian consumers, was Canada’s highest rated wireless carrier. That disparity hints at how much Canadians loathe their current wireless options.

Bay Street investors were not surprised by the announced merger, believing competition has its limits in a marketplace dominated by three enormous telecom companies — Bell (BCE), Rogers, and Telus — all collectively holding more than a 90% share of the Canadian wireless market. Many expect the remaining independent providers to also jettison their businesses or combine them in a last stand.

Industry Minister Christian Paradis, the Conservative government’s point man on independent competition in the wireless market, was caught off guard by the apparent faltering of the new carriers.

Paradis said he remains committed to making sure Canadians have a fourth choice for wireless service in every regional market in the country. But his only assured success is in Québec, where Vidéotron — the provincial cable company — competes with the big three providers. That competition has worked in that province to hold pricing down. According to The Globe & Mail, the average monthly bill in Québec dropped to $50.36 a month in 2011 from its peak in 2009 and is on par with where it stood in 2007. In comparison, according to CBC News, the average monthly wireless bill across Canada was $77 in 2013, up from $68 in last year’s survey.

Paradis is now pondering new regulations that would prevent the three largest carriers from buying out the remaining two independent providers just for their spectrum assets.

The merger will need regulatory approval from The Competition Bureau, Industry Canada, and the Canadian Radio-television and Telecommunications Commission.

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BNN reported back in April that Telus and Mobilicity were in acquisition talks. The news channel speaks with Maher Yaghi from Desjardins Securities about the implications the merger would have on the Canadian cell phone market and the prices consumers pay. (5 minutes)

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BNN this morning reported the ball is back in Ottawa’s hands as the government tries to decide how it can salvage its wireless competition agenda. (6 minutes)

Wireless Industry: We’re running out of spectrum!
Wireless Industry: We’ve got plenty to room for unlimited ESPN!

America is on the verge of a wireless traffic data jam so bad, it could bring America to its knees.

Or not.

Stop the Cap! notices with some interest that while wireless carriers continue to sound the alarm about a spectrum crisis so serious it necessitates further compressing the UHF television dial and forces other spectrum users to become closer neighbors, the same giant phone companies warning of impending doom are negotiating with online video producers to offer customers “toll-free,” all-you-cat-eat streaming video of major sports events that won’t count against your usage allowance.

ESPN is in talks with at least one major carrier (AT&T or Verizon Wireless) to subsidize some of the costs of its streamed video content so that customers can watch as much as they want without running into a provider’s usage limit. Both Verizon and AT&T have signaled their interest in allowing content producers to pay for subscribers’ data usage. In fact, they don’t seem to care who pays for the enormous bandwidth consumed by streaming video, so long as someone does.

At a recent investment bank conference Verizon Wireless chief executive Dan Mead explained the next chapter in monetizing data usage will allow the company to rake in more revenue from third parties instead of customers already struggling with high wireless bills.

“We are actively exploring those opportunities and looking at every way to bring value to our customers,” said Mead.

Content producers are increasingly frustrated with the stingy caps on offer at AT&T and Verizon Wireless because customers stop accessing that content once they near their monthly usage limit. One large provider admitted to ESPN that “significant numbers” of customers are already reaching their cap before the end of their billing cycle, after which their online usage plummets to limit the sting of overlimit charges.

Offering “toll-free” data could dramatically increase the use of high bandwidth applications and increase profits at wireless providers based on new fees they could collect from content producers. Customers would still be subject to usage limits for all non-preferred content, a clear violation of Net Neutrality principles.

The buffet is open.

But in case you forgot, wireless carriers won exemption from Net Neutrality, arguing their networks lack the capacity to sustain a Net Neutral Internet experience. These same companies claim without more frequencies to handle the massive, potentially unsustainable amount of wireless traffic, the wireless data apocalypse could be at hand in just a few years. It was also the most-cited reason AT&T and Verizon discontinued their unlimited use data plans.

But unlimiting ESPN video? No problem.

In January 2010, Verizon Wireless was singing a very different tune to the FCC about the need to control and manage high bandwidth applications like the “toll-free” streaming video service ESPN proposes (underlining ours):

Wireless broadband services face technological and operational constraints arising from the need to manage spectrum sharing by a dynamically varying number of mobile users at any time. Thus, unlike, for example, cable broadband networks, where a known and relatively fixed number of subscribers share capacity in a given area, the capacity demand at any given cell site is much more variable as the number and mix of subscribers constantly change in sometimes highly unpredictable ways.

Are wireless carriers now part of the problem?

For example, as a subscriber using a high-bandwidth application such as streaming video moves from range of one cell site to another, the network must immediately provide the needed capacity for that subscriber, while not disrupting other subscribers using that same cell site. Of course, the problem is magnified many times over as multiple subscribers can be moving in and out of range of a cell site at any given moment. Moreover, the available bandwidth can fluctuate due to variations in radio frequency signal strength and quality, which can be affected by changing factors such as weather, traffic, speed, and the nearby presence of interfering devices (e.g., wireless microphones).

These problems compound those resulting from limited spectrum. As the Commission has repeatedly recognized in proclaiming an upcoming spectrum crisis, “as wireless is increasingly used as a platform for broadband communications services, the demand for spectrum bandwidth will likely continue to increase significantly, and spectrum availability may become critical to ensuring further innovation.”

A wireless carrier cannot readily increase capacity once it has exhausted its spectrum capacity. Thus, wireless broadband providers are left to acquire additional spectrum (to the extent available) or take measures that use their existing spectrum as efficiently as possible, which they do through a combination of investing in additional cell sites and network management practices that optimize network usage and address congestion so as to provide consumers with the quality of service they expect.

Regulators need to ask why wireless companies are telling the FCC there is a bandwidth crisis of epic proportions that requires the Commission to exempt them from important Net Neutrality principles while telling investment banks, shareholders and content producers the more traffic the merrier, as long as someone pays. Customers also might ask why their unlimited use data plans were discontinued while carriers seek deals to allow unlimited viewing with their preferred content partners.

What is the real motivation? The Wall Street Journal suggests one:

“Creating a second revenue stream for mobile broadband is the holy grail for wireless operators but collecting fees from content companies would probably make the FCC take a close look into the policy implications,” said Paul Gallant, managing director at Guggenheim Securities. An FCC spokesman declined to comment.

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The Wall Street Journal takes a closer look at a plan to manage an end run around Net Neutrality by allowing preferred content partners to offer streaming video services exempt from your usage cap. (4 minutes)

Verizon FiOS is off limits to rural customers. Wireless voice and satellite broadband is in your future.

Verizon Communications has big plans for its “miraculous” wireless home phone replacement which will soon find itself in rural homes across Verizon’s service area as part of a larger plan to dismantle rural America’s wired telephone network.

Just as company executives promised more than a year ago, Verizon wants to transition rural customers to fixed wireless phone service that could mean the end of wired broadband for millions of Verizon customers still using DSL.

Verizon senior vice president Tom Maguire told Communications Daily Voice Link is Verizon’s answer for customers it cannot easily transition to fiber optics. He is thrilled about the prospects of getting rid of deteriorating copper networks in favor of an inexpensive wireless alternative.

“I’m super jazzed about this because I think it will be good for everybody,” he said. “I think it’ll change a lot.”

For rural Verizon customers, the changes could be profound, dramatic, and not exactly a win-win scenario:

• No more wired phone service, which means medical monitoring, many home security systems, and inexpensive dial-up service that all rely on landline technology will be rendered unusable;
• No more unlimited use DSL service, no business broadband service, no credit card processing or other electronic business transactions that depend on a wired connection;
• No enforced quality of service standards, rate oversight, or guarantee of access to quality voice service;
• No prospect of advanced fiber optic FiOS services, including high bandwidth video and broadband.

Verizon is making it clear Fire Island and the New Jersey Barrier Island are just the first steps towards the retirement of copper, either in favor of fiber optics in high profit/low-cost areas or wireless in rural areas not worth upgrading.

Maguire claims Fire Island residents did not want the company to tear up yards or streets to replace its damaged copper wire network with newer technology like fiber. But Fire Island residents and administrators tell Stop the Cap! they were never asked. Instead, residents are being told Voice Link is likely their only option for traditional phone service on the western half of the island, and some customers are unhappy they will never get FiOS broadband upgrades Verizon says are financially untenable to provide.

Verizon has quietly tested Voice Link in Florida, giving customers the option of keeping their wired service or switching to the wireless alternative. But the test may have been stacked in Voice Link’s favor, as the choice was given to voice-only customers having chronic service problems with Verizon’s deteriorating copper wire network.

Going forward, many rural customers may not have a choice. For those who want Internet access, Verizon isn’t promising its wireless network is up to the task. Their suggested alternative?

Verizon’s solution for rural broadband.

Get a satellite dish.

Maguire acknowledged Voice Link customers won’t be able to fax or do certain activities, but he said the telco never pretended they would. Verizon won’t be offering data services with Voice Link, but if Fire Island customers want more options, they can potentially choose satellite, he said.

Maguire believes that customers living with a deteriorating copper landline network will gravitate quickly towards a wireless phone replacement.

Verizon arranged a blind test of Voice Link for 40,000 customers in another company’s territory with unbranded devices. When the copper wire network performed normally, customers preferred the quality of traditional landline service. But after it rained, the poorly maintained network made all the difference.

“The copper sounded like hell, it was noisy and static-y,” Maguire said.

Maguire did not say if Verizon blind tested whether customers preferred traditional landline service, Voice Link, or its fiber optic FiOS network.

Verizon hopes to begin introducing its Voice Link service in other markets as early as June.